2018 (7) TMI 1271 - AT - Central Excise

Whether the show cause notice is barred by limitation and the provisions of extended period of limitation is invocable or not? Held that - All the information and transaction in question has been recorded in the books of account maintained in the normal course of business. Further, it is admitted fact that upon audit objection the appellant had reversed the appropriate amount under Rule 3 (5A) of CCR, 2004 and had also filed their categorical reply to the objections of audit received by the department on 10th June, 2008. Thus, there is no case of any suppression or malafide on the part of the appellant. The proviso to Section 11A of CEA, 1944 is not applicable because SCN does not indicate that there was deliberate act of suppression of fact, fraud, mis-statement, etc. - the SCN is hit by limitation, as the proviso to Section 11A for extended period is not invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the show cause notice is barred by limitation and if the provisions of the extended period of limitation are applicable.

Analysis:
- The appellant, a manufacturer of Sugarcane and Molasses, was audited in January 2008, where it was observed that excisable goods were cleared without payment of Central Excise duty. The Range Superintendent directed the appellant to deposit duty amount and raised an objection regarding wrongly taken Cenvat credit.
- The appellant responded, stating that the Cenvat credit was eligible as capital goods and that no credit was taken on goods sold as scrap. The appellant accepted liability for a specific amount under Rule 3(5A) of Cenvat Credit Rules 2004.
- The show cause notice was issued in March 2010, about 22 months after the audit objection. The appellant argued that the notice was time-barred, citing a ruling of the Hon'ble Allahabad High Court.
- The Tribunal noted that all transactions were recorded, and the appellant had responded to the audit objections promptly. There was no suppression or malafide intent. Relying on the High Court ruling, the Tribunal held that the show cause notice was issued beyond the limitation period and the extended period was not applicable.
- Consequently, the appeal was allowed, setting aside the impugned order, and the appellant was granted consequential relief as per the law.